Contents:
- Introduction
- Hybrid 10-Step Trading Strategy Review
- Final Trade Recommendation
- Next Steps
Introduction
Manila Electric Company (MER) has been a key stock in the Philippine market, displaying strong trends in previous months. As of January 31, 2025, the stock presents an interesting technical setup for review.
Trade Details:
- Stock: Manila Electric Company (MER)
- Exchange: PSE
- Timeframe: Monthly
- Date: January 31, 2025
- Closing Price: 448.00
- High: 503.50
- Low: 448.00
- 20-MA (Short-Term Trend): 394.31
- 200-MA (Long-Term Trend): 281.77
Key Pullback Levels:
- 100% Pullback: 520.00 (Approximate resistance zone)
- 75% Pullback: 480.00 (Significant level where price faced rejection)
- 50% Pullback: 430.00 (Mid-range zone)
- 0% Pullback: 280.00 (Long-term support near 200-MA)
This stock price review follows our Hybrid 10-Step Trading Strategy for a structured and comprehensive analysis.
Manila Electric Company (MER) Monthly Chart as of January 31, 2025
Hybrid 10-Step Trading Strategy Review
Step 1: Identify Market State & Trend Context
The long-term trend is clearly bullish, as price remains above both the 20-MA and 200-MA. However, the monthly candlestick has closed with a strong rejection from the 500+ zone, indicating potential short-term exhaustion.
✅ Market State: Uptrend, but facing short-term resistance.
🛑 Decision: HOLD – Monitor for a better re-entry.
Step 2: Price Position & Retracement Zones
- Current Position: Price is above both moving averages, confirming the long-term bullish bias.
- Retracement Zones: Price has pulled back from a high of 503.50 and is now near the 75% retracement zone at 480.00.
✅ Favorable for dip buying near 430.00-450.00.
🛑 Decision: HOLD – Wait for a reaction near 430.00.
Step 3: Power Bars, Breakout Signals & Volume Confirmation
- January’s red candle suggests profit-taking and resistance at 500+.
- Volume is relatively high but not extreme, indicating controlled selling rather than panic.
✅ Strong momentum still present, but sellers dominate this month.
🛑 Decision: WAIT – Observe the next monthly bar.
Step 4: Entry Confirmation Based on Technical Signals
- The BUY trades at 481.40 and 472.40 were executed near the 75% retracement level.
- However, the close at 448.00 suggests potential drawdown in the short term.
🛑 Decision: WAIT – Avoid adding more positions until confirmation.
Step 5: Stop-Loss Positioning & Risk Management
- Suggested stop-loss: below 420.00 for long positions.
- Risk is moderate, but holding at 448.00 requires monitoring.
✅ Risk management intact, but downside risk exists.
🛑 Decision: HOLD – No new entries until a bullish confirmation.
Step 6: Color Change Signals for Additional Confirmation
- A red closing candle suggests weak momentum going into February.
🛑 Decision: WAIT – Observe price action in early February.
Step 7: Profit-Taking Strategies with Tactical Exits
- If price retests 500+, partial exits should be considered.
- A strong close above 480.00 is needed to resume bullish momentum.
✅ Exit strategy remains the same – take profits near 500.
🛑 Decision: HOLD – No immediate selling needed.
Step 8: Potential Re-Entry Zones
- Best re-entry area: 430.00-450.00 if price stabilizes.
- A bounce confirmation from this range is ideal.
✅ Buy re-entry possible near 430.00 if support holds.
🛑 Decision: WAIT – Monitor price movement first.
Step 9: Tactical Position Adjustments
- The BUY trades at 481.40 and 472.40 are now slightly in drawdown.
- If price stabilizes in February, adding to the position near 430.00 could be considered.
🛑 Decision: WAIT – No aggressive adding yet.
Step 10: Counter-Trend Trading Considerations
- No counter-trend trade is necessary as the long-term uptrend remains intact.
🛑 Decision: HOLD – No counter-trend action needed.
Final Trade Recommendation
✅ Final Trade Recommendation: HOLD
✅ Recommendation: Maintain existing positions but avoid adding new ones until a confirmation above 450.00 or a dip to 430.00.
✅ Risk Management: Stop-loss below 420.00 to protect against downside risk.
✅ Profit-Taking Strategy: Target 480.00-500.00 for gradual exits.
✅ Position Size Strategy: Hold the current position and consider adding at 430.00 if price stabilizes.
Next Steps
🔹 Short-term traders → Avoid aggressive buying; monitor price movement for confirmation.
🔹 Long-term investors → Hold positions but be cautious if the price drops below 420.00.
🔹 Existing holders → Consider profit-taking near 500.00 on future rallies.
🚨 Final Thought: The trend is still bullish, but January's rejection suggests some cooling off. Watch the 430.00-450.00 zone for a better re-entry opportunity. 🚨
Disclaimer: This post is for informational purposes only and should not be considered financial advice. Always do your own research before making any trading decisions.
Related Readings
- Micro Stock Trader: Comparing the Modified 10-Step Trading Strategy vs. Retracement Trading Strategy
- Micro Stock Trader Portfolio Tracker Page
No comments:
Post a Comment